IFAD Murban crude futures traded volumes hit record high in April

Total traded volumes of IFAD Murban crude futures rose 10.9% on the month to 474,481 lots in April -- the highest since the contract started trading on the exchange -- data from the Intercontinental Exchange's ICE Futures Abu Dhabi showed May 7, as volatility in light and medium crude spreads last month likely prompted more hedging by traders.

Total traded volumes for the front-month June Murban 1st Line futures stood at 170,453 lots in April, climbing 15.05% on the month, from 148,155 lots for the front-month May Murban 1st Line futures in March.

The contract also saw the biggest single-day total traded volumes at 36,464 lots on April 15.

A crude derivative trader attributed the surge in traded volumes to the arbitrage between the Platts Market on Close assessment process and IFAD Murban, noting that "another factor is India [resuming] imports of Urals, thus not [absorbing] Murban unlike in previous months."

Another trader said the increase in traded volumes and open interest stemmed from "Murban being stuck in this region," as well as more financials participating in trade.

Spreads between light and medium sour crude markers exhibited wide volatility last month, driven by tightening supplies of ADNOC's medium, sour Upper Zakum crude and rising exports of the light, sour Murban crude following the completion of the 837,000 b/d Ruwais refinery's Crude Flexibility Project.

The divergent supply fundamentals saw June-loading Upper Zakum crude cargoes traded last month at as much as a 60-70 cents/b premium to Murban crude, in an inversion of the typical pricing relationship between the two.

During the Singapore MOC in April, 18 Murban crude cargoes were declared following the convergence of Dubai partials, a record high for the grade. A convergence occurs when 20 partials are traded between two counterparties, resulting in a full 500,000-barrel physical cargo being declared from the seller to the buyer.

This came after Abu Dhabi National Oil Co. increased its crude oil production capacity to 4.85 million b/d from 4.65 million b/d, bringing the state-owned producer closer to its target of 5 million b/d by 2027.

Record traded volumes

ICE Murban futures reached record traded volumes of over 1.1 million contracts in the first quarter of 2024 and saw record average daily volumes of 21,454 contracts in March, surging 152% on the year, ICE said in a notice April 19.

Since IFAD was launched, almost 6 million Murban futures contracts have been traded, which were equivalent to approximately 6 billion barrels of Murban crude oil, as 244 million barrels of Murban have been delivered through IFAD.

"Three years on from launch, we, together with ADNOC and our partners, have built a truly global Murban futures market [that] sits alongside benchmark crude grades Brent and Midland WTI," IFAD President Gary King said.

However, the total open interest for the futures contract on April 30 stood at 48,360 lots, down 7,166 lots, or 12.91%, from 55,526 lots as of March 28.

On the contrary, open interest for the front-month June 1st Line futures stood at 12,132 lots on April 30, up 14.02% from 10,640 lots for the front-month May Murban 1st Line futures on March 28.

Murban crude -- a light sour crude that has an API gravity of 40.5 and a sulfur content of 0.74% -- is ADNOC's largest crude by volume, accounting for about 2 million b/d of production capacity.

The company sets the official selling price of its flagship Murban crude based on the monthly average of the Murban's Singapore marker price on the IFAD, while the OSP for its other grades, Upper Zakum, Das Blend and Umm Lulu, is set as a differential to the Murban OSP.

The IFAD Murban contract is underpinned by ADNOC's flagship Murban crude grade and is backed by ICE, ADNOC, BP, GS Caltex, INPEX, ENEOS, PetroChina, PTT, Shell, TotalEnergies and Vitol.

ADNOC forecast Murban crude exports for April 2025 at 1.65 million b/d, down from 1.661 million b/d set for March 2025, it said in a report released April 29.

For July 2024, the availability of exports was 1.65 million b/d, up from the forecast of 1.631 million b/d in June.

Total traded volumes:

Total open interest:

Source: ICE Futures Abu Dhabi